Ebay Car Sales, why are reserve's secret?

[Shortsguy1]

I apologize if this isn't the right subforum to post this in, but hopefully someone would be willing to explain a few things about buying (and selling) Mercedes cars to a relative newcomer.

1) Do cars sold on ebay generally sell for more than on craigslist? I see the same cars bounce back and forth between the two sites, and I wonder if one is generally gets a higher price. (I am looking at this from a buyer's perspective).

2) Why are reserves kept hidden? It seems to me that it wastes a lot of people's time by keeping them secret.

3) Based on your experiences, do reserves increase or decrease the final selling price of a car? I guess there is no way to know for sure, but what are your thoughts?

Right now, (at least) two of our members have cars on ebay and one is using a reserve (and won't specify the amount when asked) and the other has no reserve. I am just trying to understand the consequences of each decision. I personally am less likely to bid on an item with a reserve, but maybe others react differently.

[ps2cho]

Well if your reserve is shown, then why would anybody bid if they don't want to pay for that right off the bat?

Plus, you are covered if it doesn't sell for your MINIMUM price. Last thing you want is selling the car for nothing.

[cmcdonnell]

A reserve protects the seller from not getting the minimum price that he is willing to sell for. The reserve is almost always secret to entice bidders to bid up to the reserve. The more bidders, the higher the selling price. Once the reserve has been met, and there are four or five bidders who want the car, the price can only go up. It is customarily considered in poor taste to ask a seller what his reserve is. Craigslist is another story. A car on Craigslist is only worth what a buyer will pay for it, or it will not sell.

[engatwork]

I will typically post what the reserve is.

[Shortsguy1]

Thanks all for your replies. I think what I didn't understand is the emotional/exciting aspect of bidding on a car that some ebay users must experience. For me, bidding when the reserve hasn't been met yet feels like a waste of time. But for others, it must get them involved and interested in the process, with the hope of eventually driving the price higher than it would have reached with a starting minimum bid equal to the reserve. I am probably approaching the process a bit too analytically.

[Cal Learner]

The conventional wisdom is that auctions without reserves generally bring a better price, because bidders know that the vehicle will be sold and are therefore more willing to participate, thus driving up the price. Of course, any individual seller who attaches sentimental value to his vehicle--beyond its intrinsic market value--is likely to include a reserve.

[cmcdonnell]

Originally Posted by Cal Learner

The conventional wisdom is that auctions without reserves generally bring a better price, because bidders know that the vehicle will be sold and are therefore more willing to participate, thus driving up the price. Of course, any individual seller who attaches sentimental value to his vehicle--beyond its intrinsic market value--is likely to include a reserve.

I agree, it is much more attractive to a bidder to bid on a car with a very low starting price and no reserve. When I was selling cars on ebay, the real goal was to get bidders interested in the car and to bid, no matter how low the beginning price. The number of bidders shows on the listing. The more bidders, the more a person is likely to think that this is a car worth bidding on. There are cases where a reserve makes sense; a special car which has limited following, like a 1970 300SEL 6.3 that I put a reserve on at $10,000.00. I didn't expect very many bidders on a niche vehicle like this.